Key Documents

Report - 'Iron Man 3' generated $179.8M in spending, 2,043 jobs

Published: Tuesday, April 30, 2013 at 12:25 p.m.

Last Modified: Tuesday, April 30, 2013 at 12:25 p.m.

A report from the movie industry's main trade association asserts “Iron Man 3” spent nearly $180 million in North Carolina and put about 2,000 residents to work in the year the big-budget blockbuster filmed in the state.

The Marvel movie, which began production in December 2011 and wrapped about 13 months later, tapped more than 700 businesses in about 85 communities in North Carolina, including the cities of Wilmington, Rose Hill and Wallace, according to a Motion Picture Association of America report released Tuesday.

It's the first film-specific study commissioned by the trade association, which is composed of the six major Hollywood studios, including Walt Disney Studios Motion Pictures, the parent company of Marvel, according to MPAA spokeswoman Kate Bedingfield.

“We often do economic impact studies on the film industry in states as a whole – Florida is one. We did a New York state study last December,” Bedingfield wrote in an email. “‘Iron Man 3' was one of the largest productions ever shot in North Carolina, and we wanted to use this as an opportunity to illustrate just how impactful such a large production can be on a state's economy, both in terms of jobs and economic contribution back to the state. This production offered such a good opportunity to highlight the impact that a major production can have.”

The firm used Impact Analysis for Planning (IMPLAN), an industry standard economic impact calculator, to determine how many jobs relied on the state's tax incentive program.

According to the study, conducted by Canadian firm MNP, “Iron Man 3” created the equivalent of 102 full-time jobs for every $1 million of the movie's $20 million tax credit. About 27 percent of labor spending went toward in-state hires, the study said.

William “Woody” Hall, an economist at the University of North Carolina Wilmington who has used the same economic model to track the impact a mid-size studio production would have on New Hanover County's economy, said the methodology was standard and “straight forward,” but that the study took a leap in tying economic output directly to the incentive.

“There's something else that brings people here other than the credit,” Hall said. “We don't know how much we got because of the incentive, which means we don't know how much we'd lose if we didn't have it.”

According to the report, additional benefits from the production include:

$8.99 in economic output for every dollar of tax credit received by the production.

$6.50 in Gross State Product for every dollar of tax credit received by the production.

$5.20 in labor income for every dollar of tax credit received by the production.

The report comes days before “Iron Man 3's” release and a few weeks after an economic impact study from General Assembly staff using a different economic model found that North Carolina's film credit was responsible for 290 to 350 fewer jobs than would have been created through an across-the-board tax reduction of the same magnitude. That report credits the film industry with only attracting 55 to 70 new jobs to the state in 2011.

Under state law, film production companies can claim a 25 percent tax credit – up to $20 million – on productions spending more than $250,000 in qualifying expenses.

A bill proposed by two local lawmakers that would limit credits to tax liability for films also awaits action in the state House.

The timing of the release had nothing to do with the House bill, according to Bedingfield.

“Iron Man 3” will receive a rebate of $20 million through state tax incentives. An audit of all film spending in the state will be released Wednesday.

<p>A report from the movie industry's main trade association asserts “Iron Man 3” spent nearly $180 million in North Carolina and put about 2,000 residents to work in the year the big-budget blockbuster filmed in the state. </p><p>The Marvel movie, which began production in December 2011 and wrapped about 13 months later, tapped more than 700 businesses in about 85 communities in North Carolina, including the cities of Wilmington, Rose Hill and Wallace, according to a Motion Picture Association of America report released Tuesday.</p><p>It's the first film-specific study commissioned by the trade association, which is composed of the six major Hollywood studios, including Walt Disney Studios Motion Pictures, the parent company of Marvel, according to MPAA spokeswoman Kate Bedingfield.</p><p>“We often do economic impact studies on the film industry in states as a whole – Florida is one. We did a New York state study last December,” Bedingfield wrote in an email. “'Iron Man 3' was one of the largest productions ever shot in North Carolina, and we wanted to use this as an opportunity to illustrate just how impactful such a large production can be on a state's economy, both in terms of jobs and economic contribution back to the state. This production offered such a good opportunity to highlight the impact that a major production can have.”</p><p>The firm used Impact Analysis for Planning (IMPLAN), an industry standard economic impact calculator, to determine how many jobs relied on the state's tax incentive program.</p><p>According to the study, conducted by Canadian firm MNP, “Iron Man 3” created the equivalent of 102 full-time jobs for every $1 million of the movie's $20 million tax credit. About 27 percent of labor spending went toward in-state hires, the study said.</p><p>William “Woody” Hall, an economist at the University of North Carolina Wilmington who has used the same economic model to track the impact a mid-size studio production would have on New Hanover County's economy, said the methodology was standard and “straight forward,” but that the study took a leap in tying economic output directly to the incentive.</p><p>“There's something else that brings people here other than the credit,” Hall said. “We don't know how much we got because of the incentive, which means we don't know how much we'd lose if we didn't have it.”</p><p>According to the report, additional benefits from the production include:</p><p>$8.99 in economic output for every dollar of tax credit received by the production.</p><p>$6.50 in Gross State Product for every dollar of tax credit received by the production.</p><p>$5.20 in labor income for every dollar of tax credit received by the production.</p><p>The report comes days before “Iron Man 3's” release and a few weeks after an economic impact study from General Assembly staff using a different economic model found that North Carolina's film credit was responsible for 290 to 350 fewer jobs than would have been created through an across-the-board tax reduction of the same magnitude. That report credits the film industry with only attracting 55 to 70 new jobs to the state in 2011.</p><p>Under state law, film production companies can claim a 25 percent tax credit – up to $20 million – on productions spending more than $250,000 in qualifying expenses.</p><p>A bill proposed by two local lawmakers that would limit credits to tax liability for films also awaits action in the state House.</p><p>The timing of the release had nothing to do with the House bill, according to Bedingfield.</p><p>“Iron Man 3” will receive a rebate of $20 million through state tax incentives. An audit of all film spending in the state will be released Wednesday.</p><p><i></p><p>The Associated Press contributed to this report.</i></p><p>Cassie Foss: 343-2365</p><p>On <a href="http://www.starnewsonline.com/section/news41"><b>Twitter</b></a>: @WilmOnFilm</p>